WIN Magazine - Summer 2015 - (Page 28)

FEATURE thE futurE of mAnAging tErrorism risk is rEliAnt on thE industry Adopting A solution thAt is not only fEAsiBlE in implEmEntAtion, But Also EconomicAlly sustAinABlE. T By Eric w. vickErs, uAcic industry chAllenGes & oPPortunities HE THrEaT Of global terrorism poses unprecedented challenges - conceptual, technical, and operational - for the insurance industry. The effects of terrorist events can be enduring, incurring virtually limitless costs and consequences to the economy. Through analysis of the nature of terrorism risk, issues with insurability become apparent. Despite offering coverage for such events, insurers face difficulties in measuring and quantifying terrorism risk to underwrite it profitably. With the current political environment, the uncertainty of the government's role is a concern for insurers, risk managers, and lawmakers. The future of managing terrorism risk is reliant on the industry adopting a solution that is not only feasible in implementation, but also economically sustainable. TERRoRIsm RIsk - ECoNomIC ImpACT & INDUsTRy REspoNsE A conceptual understanding of terrorism and the inherent loss exposures is essential. The Federal Bureau of Investigation defines terrorism as "the unlawful use of force or violence against persons or property to intimidate or coerce a government, the civilian population, or any segment thereof in furtherance of political or social objectives" (What We Investigate, 2010). Acts of terrorism can have severe economic consequences "by diverting foreign direct investment, 2 8 | v i e w t h i s i s s u e a t |

Table of Contents for the Digital Edition of WIN Magazine - Summer 2015

Why Inspections Matter: Ascertaining the True Liability of the Risk
Why You Might Want to Consider an Agency Captive
AAMGA 2015 Winning White Papers
Why the BP Macondo Gulf Blowout is Important…and It’s Not What You Think
Terrorism Risk: Industry Challenges & Opportunities
Cyber Warfare: An Emerging Market for the Excess and Surplus Lines Market
The Genomic Revolution: Where Does Insurance Play a Role?
WIN Magazine Marks Fifth Anniversary: The Voice of the Wholesale Insurance Network™
Education, Networking and Leadership: Wholesale Insurance Professionals Gather at AAMGA’s University East
In the WIN-ner’s Circle: An Interview with Matthew H. Letson
Index of Advertisers

WIN Magazine - Summer 2015